Hydrogen Oman (Hydrom) has signed agreements to develop two green hydrogen projects worth $10 billion, the Oman News Agency reported Thursday, as the sultanate expands its presence in the sustainable energy sector.
Hydrom is a subsidiary of Energy Development Oman, an organization established in December 2020 at the behest of the sultan to focus on growing the country’s energy sector.
The first agreement was signed between the POSCO-ENGIE (MESCAT Middle East DMCC) consortium and other consortium partners including Samsung Engineering, Thai national petroleum company PTTEP, and Korean utility companies Korea East-West Power Co. and Korea Southern Power Co.
The other green hydrogen deal was with the Hyport Duqm consortium, comprising Belgium-based international contractor and developer DEME and Omani energy company OQ.
The total estimated production of the two projects will be 250,000 metric tons of green hydrogen or 6.5 gigawatts of renewable energy capacity.
Earlier in June, Hydrom signed three deals granting the first green hydrogen blocks in Oman, with total investments projected to exceed $20 billion.
Green hydrogen has many uses. It can be transformed into electricity or synthetic gas in a much more sustainable way than traditional methods. With these projects, Oman is positioning itself as one of the world’s leaders in green hydrogen, in a region with ample potential to develop the product. The International Energy Agency (IEA) said earlier this month that Oman, a country whose economy has traditionally been dependent on hydrocarbons, has a net zero target by 2050 and looks to significantly increase its domestic production of hydrogen from renewable electricity.
“The country is well placed to produce large quantities of renewable hydrogen and hydrogen-based fuels like ammonia thanks to its high-quality renewable resources,” the IEA said in a report.
“Oman has also vast amounts of land for large-scale project development and existing fossil fuel infrastructure that can be used or repurposed for low-emission fuels,” it added. “Oman can become a competitive producer and exporter of renewable hydrogen and ammonia already by the end of this decade, while simultaneously increasing the share of renewables in its power mix.”
Karen Young, a senior research scholar at the Center on Global Energy Policy at Columbia University, said there were several projects in the region to generate green hydrogen and create derivative products, most importantly ammonia, from green hydrogen.
Young, who recently released her book "The Economic Statecraft of Gulf Arab States," pointed out that Oman is not yet the most significant green hydrogen player in the region.
“If you look at project plans by expected investment dollars, Egypt has actually the largest in the planning and procurement phases and there are sizable projects in Saudi Arabia, UAE and Morocco as well,” Young told Al-Monitor, referring to data from MEED.
That data shows that Egypt has a green hydrogen project pipeline of investment worth $83.45 billion, with Oman following at $55.41 billion. Morocco, Saudi Arabia and the UAE follow, with $16.85 billion, $13 billion and $12.08 billion of investment, respectively.
One example of significant green hydrogen investment is in Saudi Arabia’s giga project NEOM, which in May closed $8.4 billion in financing to create green hydrogen-based ammonia. The deal involves industrial gases company Air Products buying the green ammonia for 30 years at an agreed-upon price.
Robin Mills, CEO of Qamar Energy, told Al-Monitor, “Saudi Arabia has the most advanced MENA green hydrogen project (NEOM), but Oman has more in number and total volume under development, depending on how many actually make it through to investment decisions. We are currently tracking nearly 3.2 million tons of Oman green hydrogen capacity, while NEOM is 0.22 million tons per year.”
He said that although the IEA report is encouraging for Oman, the country is already active in this sphere and the key hydrogen players are already aware of its potential. Oman has projects under development by Shell, BP, Acme (India), Intercontinental, POSCO-ENGIE and others, Mills said.
Young said that the market for green hydrogen will continue to develop in tandem with large projects that may decide to create zero-carbon or low-carbon ammonia or even methanol, depending on how the technology evolves to use these as transportation fuels and in other products.
But she noted that Oman’s new green hydrogen projects have already attracted a diverse set of international investors with a consortium including Belgian, South Korean and Thai companies.
Al-Monitor has contacted Oman’s Energy Ministry for comment.